Property/casualty insurance professionals of all stripes are waiting for the day the soft market ends but none perhaps more than surplus lines brokers who specialize in commercial property.

"The market is just crowded, it has been crowded for awhile," says Mike Waitkus, senior vice president of Property for Allied World U.S. "There is an oversupply of capacity in admitted and non-admitted both. There are a lot of players in the same game and an abundance of capacity, which creates a pretty soft environment. Hopefully we are at the bottom but who knows."

Excess and surplus lines companies focus much of their attention on hard-to-place or catastrophe- exposed commercial properties. E&S companies depend on this class for much of their business and that business has suffered because of a continued soft insurance market and difficult real estate market, say underwriters. It is no secret that low catastrophe losses the past few years have contributed to what seems like a never-ending soft market. The economy and the financial crisis also forced many businesses to cut back on their property insurance and caused a huge slowdown in the building of commercial property.

In addition, E&S companies have had to deal with increased competition from standard markets that previously shied away from some commercial property segments and geographic regions after Hurricanes Katrina and Ike but are now interested in taking them on.

While rates are higher for properties in CAT prone areas of Florida, the Gulf of Mexico, and earthquake zones of California, they are still not as high as they would be if there had been a hurricane or major catastrophic event.

"There have been many miniature CAT events throughout the country, such as flooding in Nashville, and the Carolinas, freezing in Dallas, or the 10 inches of rain in Chicago over the summer. All of these things add up to meaningful losses for the industry but they are no Katrina or a game changing event," says Waitkus. "So without game a changing event, there is nothing to change the prices and they stay at a soft level."

Few, if any, in the business are expecting a game-changer to happen overnight.

Jim Christopherson, senior vice president and regional property director for CRC Insurance located in Houston, Texas, and Paul Martin, senior vice president and regional property director for CRC Insurance in Birmingham, Ala., are among those who don't expect a big change in the market anytime soon.

"What would I foresee for 2011 is that we will see more of the same," says Martin. "You talk to underwriters and you talk to agents and everyone wants to think this soft market is as bad as it's ever been, but when you dig deeper it's not as soft or as bad as people think overall."

"We say it's a soft market but relative to what? It's important to realize the past and where we are today compared to the past. I don't think it's as soft as people think."

The CRC executives think there are a few pockets where soft pricing hasn't taken over. These include apartment buildings in Houston or the Tri-County and Tampa Bay areas of Florida, which aren't soft because there are still few carriers that will write in those places. Martin says there is also the chance that some markets may be able to take some of Citizens Insurance's business in Florida when the company raises its rates in 2011.

Those high-demand counties are the exception rather than the rule in a market where capacity is abundant and more and more standard lines carriers have an appetite for commercial property.

Christopherson and Martin say competing with the admitted market is almost impossible for E&S companies, but they can always provide service.

They said it is important for wholesale brokers and retail agents to manage their time wisely and focus on areas of the commercial property market where they can really help a client.

"We will look at anything but will we end up quoting? Maybe, maybe not," Christopherson says. "But we can offer market expertise and we can recommend other places to go. We might decline an opportunity, but as a wholesale broker, really the only thing you can control is your time and where you spend it. We want to help clients on things they really need us for. If we aren't doing that, we aren't working as efficiently as we can."

"In this kind of marketplace, service is extremely important," says Martin. "Clients call and they expect a return call. If they have a question, they expect an answer."

As for its commercial property appetite, Allied World U.S. likes shopping malls, municipalities, office buildings, hotels/motels, warehouses and retail centers. It will cover the building and any related contents, loss of income and business interruption. Allied World U.S. also looks at light manufacturing/non high-hazard commercial properties.

Allied World U.S. has been busy establishing a regional branch architecture around the country in the last 24 months, adding offices in Los Angeles and Dallas in addition to branches in New York, Chicago and San Francisco. The goal is to help it build better relationships with local producers and develop a steady flow of submission activity.

Waitkus says the agents in the commercial property sector are professional and knowledgeable, even when it comes to CAT modeling and technology, which is crucial to commercial property. "It is educated brokers selling to educated and experienced underwriters in this particular segment," says Waitkus.

Martin and Chistopherson say that E&S brokers have an advantage over the standard markets in their relationships with the E&S markets and they need to protect those relationships by being careful not send the applications to too many wholesale brokers.

"Competition isn't a bad thing, we welcome competition," says Christopherson. "But it needs to be controlled and the person controlling the process needs to understand it… Property expertise is something to rely on."